Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Interpretive Notice Entitled “NFA Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures Contracts”, 23027-23028 [2014-09394]

Download as PDF Federal Register / Vol. 79, No. 80 / Friday, April 25, 2014 / Notices SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71980; File No. SR–NFA– 2014–02] Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to Interpretive Notice Entitled ‘‘NFA Compliance Rule 2–30(b): Risk Disclosure Statement for Security Futures Contracts’’ April 21, 2014. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’),1 and Rule 19b-7 under the Exchange Act,2 notice is hereby given that on April 7, 2014, National Futures Association (‘‘NFA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I, II, and III below, which Items have been substantially prepared by NFA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. NFA also filed this proposed rule change with the Commodity Futures Trading Commission (‘‘CFTC’’). On December 5, 2013, NFA requested that the CFTC make a determination that review of the proposed rule change of NFA is not necessary.3 On March 21, 2014, the CFTC notified NFA that the CFTC had determined not to review the proposed rule change.4 I. Self-Regulatory Organization’s Description and Text of the Proposed Rule Change The amendments to NFA’s Interpretive Notice 9050 entitled ‘‘NFA Compliance Rule 2–30(b): Risk Disclosure Statement for Security Futures Contracts’’ (‘‘Interpretive Notice 9050’’) make a minor change to the settlement section of the risk disclosure statement for security futures contracts (‘‘Statement’’) to reflect an alternative settlement and clearance process that will be used for a new security futures product (‘‘SFP’’). The proposed rule change would accommodate the clearing of physically-settled single stock futures (‘‘SSFs’’) on a shorter time mstockstill on DSK4VPTVN1PROD with NOTICES 1 15 U.S.C. 78s(b)(7). 2 17 CFR 240.19b–7. 3 See Letter dated December 5, 2013, from Thomas W. Sexton, III, Senior Vice President/ General Counsel, NFA, to Melissa D. Jurgens, Secretary, Office of the Secretariat, CFTC. 4 See Letter dated March 21, 2014, from Gary Barnett, Director, Division of Swap Dealer and Intermediary Oversight, CFTC, to Thomas W. Sexton, III, Senior Vice President/General Counsel, NFA. VerDate Mar<15>2010 16:57 Apr 24, 2014 Jkt 232001 frame than three business days after the maturity date of each such physicallysettled SSF. The text of the proposed rule change is available on NFA’s Web site at www.nfa.futures.org, at the principal office of NFA and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NFA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NFA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of these statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Section 15A(k) of the Exchange Act 5 makes NFA a national securities association for the limited purpose of regulating the activities of NFA Members (‘‘Members’’) who are registered as brokers or dealers under Section 15(b)(11) of the Exchange Act.6 NFA’s Interpretive Notice 9050 applies to all Members and persons associated with Members (‘‘Associates’’) who meet the criteria outlined in Interpretive Notice 9050. Interpretive Notice 9050 requires NFA Members and Associates who are registered as brokers or dealers under Section 15(b)(11) of the Exchange Act to provide the Statement to a customer at or before the time the Member approves the account to trade SFPs. The Statement is a uniform disclosure that was jointly developed in 2002 by NFA, the Financial Industry Regulatory Authority (‘‘FINRA’’) (then known as NASD) and a number of securities and futures exchanges. Among other things, the Statement describes the features of SFPs, including the settlement process. The amendment makes a minor change to the settlement section of the Statement to reflect an alternative settlement process that will be used for a new SFP, namely SSFs. In addition, FINRA intends to make the same modifications to its risk disclosure statement for security futures contracts 5 15 6 15 PO 00000 U.S.C. 78o–3(k). U.S.C. 78o(b)(11). Frm 00085 Fmt 4703 23027 to cover its members, and has proposed a similar rule change. Amendments to Interpretive Notice 9050 were previously filed with the SEC in SR–NFA–2002–05, Exchange Act Release No. 34–46613 (October 7, 2002), 67 FR 64176 (October 17, 2002); SR– NFA–2002–06, Exchange Act Release No. 34–47150 (January 9, 2003), 68 FR 2381 (January 16, 2003); SR–NFA– 2007–07, Exchange Act Release No. 34– 57142 (January 14, 2008), 73 FR 3502, (January 18, 2008); SR–NFA–2010–02, Exchange Act Release 34–62624 (August 2, 2010), 75 FR 47666 (August 6, 2010); and SR–NFA–2010–03, Exchange Act Release 34–62651 (August 4, 2010), 75 FR 48393 (August 10, 2010). 2. Statutory Basis NFA believes that the proposed rule change is consistent with Section 15A(k)(2)(B) of the Exchange Act.7 That section requires NFA to have rules that are designed to prevent fraudulent and manipulative acts and practices, to promote just and equitable principles of trade, and, in general, to protect investors and the public interest, including rules governing sales practices of security futures products. NFA believes the proposed rule change accomplishes this by changing the Statement to include reference to an alternative settlement process that will be for a new SFP, namely SSFs. B. Self-Regulatory Organization’s Statement on Burden on Competition NFA does not believe the proposed rule change would impose any burden on competition that is not necessary or appropriate in furtherance of the purposes of the Exchange Act as amended.8 The proposal does not impose new requirements on Members, but rather will change the settlement section of the Statement to reflect an alternative settlement process that will be used for a new SFP, namely SSFs. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were either solicited or received. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action NFA filed the proposed rule change with the CFTC on December 5, 2013.9 7 15 U.S.C. 78o–3(k)(2)(D). U.S.C. 78q–1(b)(3)(l). 9 See Letter dated December 5, 2013, from Thomas W. Sexton, III, Senior Vice President/ 8 15 Continued Sfmt 4703 E:\FR\FM\25APN1.SGM 25APN1 23028 Federal Register / Vol. 79, No. 80 / Friday, April 25, 2014 / Notices On March 21, 2014, the CFTC notified NFA that the CFTC had determined not to review the proposed rule change.10 NFA did not file the proposed rule changes concurrently with the SEC. Instead, NFA filed the proposed rule changes on April 7, 2014. Section 19(b)(7)(B) of the Exchange Act provides that a proposed rule change filed with the SEC pursuant to Section 19(b)(7)(A) of the Exchange Act shall be filed concurrently with the CFTC. Section 19(b)(7)(C) of the Exchange Act provides, inter alia, that ‘‘[a]ny proposed rule change of a selfregulatory organization that has taken effect pursuant to [Section 19(b)(7)(B) of the Exchange Act] may be enforced by such self-regulatory organization to the extent such rule is not inconsistent with the provisions of this chapter, the rules and regulations thereunder, and applicable Federal law.’’ At any time within 60 days of the date of effectiveness of the proposed rule change, the Commission, after consultation with the CFTC, may summarily abrogate the proposed rule change and require that the proposed rule change be refiled in accordance with the provisions of Section 19(b)(1) of the Exchange Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Exchange Act. Comments may be submitted by any of the following methods: mstockstill on DSK4VPTVN1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an email to rulecomments@sec.gov. Please include File Number SR–NFA–2014–02 on the subject line. Paper Comments • Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–NFA–2014–02. This file number should be included on the subject line if email is used. To help the Commission process and review your comments more efficiently, please use General Counsel, NFA, to Melissa D. Jurgens, Secretary, Office of the Secretariat, CFTC. 10 See Letter dated March 21, 2014, from Gary Barnett, Director, Division of Swap Dealer and Intermediary Oversight, CFTC, to Thomas W. Sexton, III, Senior Vice President/General Counsel, NFA. VerDate Mar<15>2010 16:57 Apr 24, 2014 Jkt 232001 only one method. The Commission will post all comments on the Commission’s Web site (https://www.sec.gov/rules/ sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room, 100 F Street NE., Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of NFA. All comments received will be posted without change; the Commission does not edit personal identifying information from submissions. You should submit only information that you wish to make publicly available. All submissions should refer to File Number SR–NFA–2014–02 and should be submitted on or before May 16, 2014. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.11 Kevin M. O’Neill, Deputy Secretary. [FR Doc. 2014–09394 Filed 4–24–14; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION [Release No. 34–71976; File No. SR–NFA– 2014–01] Self-Regulatory Organizations; National Futures Association; Notice of Filing and Immediate Effectiveness of Proposed Rule Change to the Interpretive Notice to NFA Compliance Rules 2–7 and 2–24 and Registration Rule 401: Proficiency Requirements for SFPs April 21, 2014. Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 (‘‘Exchange Act’’),1 and Rule 19b–7 under the Exchange Act,2 notice is hereby given that on April 7, 2014, National Futures Association (‘‘NFA’’) filed with the Securities and Exchange Commission (‘‘SEC’’ or ‘‘Commission’’) the proposed rule change described in Items I and II below, which Items have 11 17 CFR 200.30–3(a)(73). U.S.C. 78s(b)(7). 2 17 CFR 240.19b–7. 1 15 PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 been prepared by NFA. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. NFA also filed this proposed rule change on November 20, 2012 with the Commodity Futures Trading Commission (‘‘CFTC’’). NFA, on November 20, 2012, requested that the CFTC make a determination that review of the proposed rule change of NFA is not necessary.3 On February 14, 2013, the CFTC notified NFA that it had determined not to review the proposed rule change.4 I. Self-Regulatory Organization’s Statement of the Terms of the Substance of the Proposed Rule Change The amendments to the Interpretive Notice entitled ‘‘NFA Compliance Rules 2–7 and 2–24 and Registration Rule 401: Proficiency Requirements for Security Futures Products’’ (‘‘Notice’’) extends the relief from having to take a proficiency exam to engage in security futures activities from December 31, 2012 to December 31, 2015. The text of the Interpretive Notice is available on NFA’s Web site at www.nfa.futures.org, the Commission’s Web site at www.sec.gov, the selfregulatory organization’s office, and at the Commission’s Public Reference Room. II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, NFA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. NFA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose Section 15A(k) of the Exchange Act 5 makes NFA a national securities association for the limited purpose of 3 See Letter dated November 20, 2012 from Thomas W. Sexton, III, Senior Vice President/ General Counsel, NFA to Sauntia Warfield, Assistant Secretary, Office of the Secretariat, CFTC. 4 See Letter dated February 14, 2013 from Gary Barnett, Director, Division of Swap Dealer and Intermediary Oversight, to Thomas W. Sexton, III, Senior Vice President/General Counsel, NFA. 5 15 U.S.C. 78o–3(k). E:\FR\FM\25APN1.SGM 25APN1

Agencies

[Federal Register Volume 79, Number 80 (Friday, April 25, 2014)]
[Notices]
[Pages 23027-23028]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2014-09394]



[[Page 23027]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-71980; File No. SR-NFA-2014-02]


Self-Regulatory Organizations; National Futures Association; 
Notice of Filing and Immediate Effectiveness of Proposed Rule Change 
Relating to Interpretive Notice Entitled ``NFA Compliance Rule 2-30(b): 
Risk Disclosure Statement for Security Futures Contracts''

April 21, 2014.
    Pursuant to Section 19(b)(7) of the Securities Exchange Act of 1934 
(``Exchange Act''),\1\ and Rule 19b-7 under the Exchange Act,\2\ notice 
is hereby given that on April 7, 2014, National Futures Association 
(``NFA'') filed with the Securities and Exchange Commission (``SEC'' or 
``Commission'') the proposed rule change described in Items I, II, and 
III below, which Items have been substantially prepared by NFA. The 
Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons. NFA also filed this 
proposed rule change with the Commodity Futures Trading Commission 
(``CFTC'').
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(7).
    \2\ 17 CFR 240.19b-7.
---------------------------------------------------------------------------

    On December 5, 2013, NFA requested that the CFTC make a 
determination that review of the proposed rule change of NFA is not 
necessary.\3\ On March 21, 2014, the CFTC notified NFA that the CFTC 
had determined not to review the proposed rule change.\4\
---------------------------------------------------------------------------

    \3\ See Letter dated December 5, 2013, from Thomas W. Sexton, 
III, Senior Vice President/General Counsel, NFA, to Melissa D. 
Jurgens, Secretary, Office of the Secretariat, CFTC.
    \4\ See Letter dated March 21, 2014, from Gary Barnett, 
Director, Division of Swap Dealer and Intermediary Oversight, CFTC, 
to Thomas W. Sexton, III, Senior Vice President/General Counsel, 
NFA.
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Description and Text of the Proposed 
Rule Change

    The amendments to NFA's Interpretive Notice 9050 entitled ``NFA 
Compliance Rule 2-30(b): Risk Disclosure Statement for Security Futures 
Contracts'' (``Interpretive Notice 9050'') make a minor change to the 
settlement section of the risk disclosure statement for security 
futures contracts (``Statement'') to reflect an alternative settlement 
and clearance process that will be used for a new security futures 
product (``SFP''). The proposed rule change would accommodate the 
clearing of physically-settled single stock futures (``SSFs'') on a 
shorter time frame than three business days after the maturity date of 
each such physically-settled SSF.
    The text of the proposed rule change is available on NFA's Web site 
at www.nfa.futures.org, at the principal office of NFA and at the 
Commission's Public Reference Room.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, NFA included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. NFA has prepared summaries, set forth in sections A, B, 
and C below, of the most significant aspects of these statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    Section 15A(k) of the Exchange Act \5\ makes NFA a national 
securities association for the limited purpose of regulating the 
activities of NFA Members (``Members'') who are registered as brokers 
or dealers under Section 15(b)(11) of the Exchange Act.\6\ NFA's 
Interpretive Notice 9050 applies to all Members and persons associated 
with Members (``Associates'') who meet the criteria outlined in 
Interpretive Notice 9050.
---------------------------------------------------------------------------

    \5\ 15 U.S.C. 78o-3(k).
    \6\ 15 U.S.C. 78o(b)(11).
---------------------------------------------------------------------------

    Interpretive Notice 9050 requires NFA Members and Associates who 
are registered as brokers or dealers under Section 15(b)(11) of the 
Exchange Act to provide the Statement to a customer at or before the 
time the Member approves the account to trade SFPs. The Statement is a 
uniform disclosure that was jointly developed in 2002 by NFA, the 
Financial Industry Regulatory Authority (``FINRA'') (then known as 
NASD) and a number of securities and futures exchanges. Among other 
things, the Statement describes the features of SFPs, including the 
settlement process.
    The amendment makes a minor change to the settlement section of the 
Statement to reflect an alternative settlement process that will be 
used for a new SFP, namely SSFs. In addition, FINRA intends to make the 
same modifications to its risk disclosure statement for security 
futures contracts to cover its members, and has proposed a similar rule 
change.
    Amendments to Interpretive Notice 9050 were previously filed with 
the SEC in SR-NFA-2002-05, Exchange Act Release No. 34-46613 (October 
7, 2002), 67 FR 64176 (October 17, 2002); SR-NFA-2002-06, Exchange Act 
Release No. 34-47150 (January 9, 2003), 68 FR 2381 (January 16, 2003); 
SR-NFA-2007-07, Exchange Act Release No. 34-57142 (January 14, 2008), 
73 FR 3502, (January 18, 2008); SR-NFA-2010-02, Exchange Act Release 
34-62624 (August 2, 2010), 75 FR 47666 (August 6, 2010); and SR-NFA-
2010-03, Exchange Act Release 34-62651 (August 4, 2010), 75 FR 48393 
(August 10, 2010).
2. Statutory Basis
    NFA believes that the proposed rule change is consistent with 
Section 15A(k)(2)(B) of the Exchange Act.\7\ That section requires NFA 
to have rules that are designed to prevent fraudulent and manipulative 
acts and practices, to promote just and equitable principles of trade, 
and, in general, to protect investors and the public interest, 
including rules governing sales practices of security futures products. 
NFA believes the proposed rule change accomplishes this by changing the 
Statement to include reference to an alternative settlement process 
that will be for a new SFP, namely SSFs.
---------------------------------------------------------------------------

    \7\ 15 U.S.C. 78o-3(k)(2)(D).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    NFA does not believe the proposed rule change would impose any 
burden on competition that is not necessary or appropriate in 
furtherance of the purposes of the Exchange Act as amended.\8\ The 
proposal does not impose new requirements on Members, but rather will 
change the settlement section of the Statement to reflect an 
alternative settlement process that will be used for a new SFP, namely 
SSFs.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78q-1(b)(3)(l).
---------------------------------------------------------------------------

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were either solicited or received.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    NFA filed the proposed rule change with the CFTC on December 5, 
2013.\9\

[[Page 23028]]

On March 21, 2014, the CFTC notified NFA that the CFTC had determined 
not to review the proposed rule change.\10\
---------------------------------------------------------------------------

    \9\ See Letter dated December 5, 2013, from Thomas W. Sexton, 
III, Senior Vice President/General Counsel, NFA, to Melissa D. 
Jurgens, Secretary, Office of the Secretariat, CFTC.
    \10\ See Letter dated March 21, 2014, from Gary Barnett, 
Director, Division of Swap Dealer and Intermediary Oversight, CFTC, 
to Thomas W. Sexton, III, Senior Vice President/General Counsel, 
NFA.
---------------------------------------------------------------------------

    NFA did not file the proposed rule changes concurrently with the 
SEC. Instead, NFA filed the proposed rule changes on April 7, 2014. 
Section 19(b)(7)(B) of the Exchange Act provides that a proposed rule 
change filed with the SEC pursuant to Section 19(b)(7)(A) of the 
Exchange Act shall be filed concurrently with the CFTC.
    Section 19(b)(7)(C) of the Exchange Act provides, inter alia, that 
``[a]ny proposed rule change of a self-regulatory organization that has 
taken effect pursuant to [Section 19(b)(7)(B) of the Exchange Act] may 
be enforced by such self-regulatory organization to the extent such 
rule is not inconsistent with the provisions of this chapter, the rules 
and regulations thereunder, and applicable Federal law.'' At any time 
within 60 days of the date of effectiveness of the proposed rule 
change, the Commission, after consultation with the CFTC, may summarily 
abrogate the proposed rule change and require that the proposed rule 
change be refiled in accordance with the provisions of Section 19(b)(1) 
of the Exchange Act.

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Exchange Act. Comments may be submitted 
by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number SR-NFA-2014-02 on the subject line.

Paper Comments

     Send paper comments in triplicate to Secretary, Securities 
and Exchange Commission, 100 F Street NE., Washington, DC 20549-1090.

All submissions should refer to File Number SR-NFA-2014-02. This file 
number should be included on the subject line if email is used. To help 
the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Web site (https://www.sec.gov/rules/sro.shtml). Copies 
of the submission, all subsequent amendments, all written statements 
with respect to the proposed rule change that are filed with the 
Commission, and all written communications relating to the proposed 
rule change between the Commission and any person, other than those 
that may be withheld from the public in accordance with the provisions 
of 5 U.S.C. 552, will be available for Web site viewing and printing in 
the Commission's Public Reference Room, 100 F Street NE., Washington, 
DC 20549, on official business days between the hours of 10 a.m. and 3 
p.m. Copies of such filing also will be available for inspection and 
copying at the principal office of NFA. All comments received will be 
posted without change; the Commission does not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make publicly available. All submissions 
should refer to File Number SR-NFA-2014-02 and should be submitted on 
or before May 16, 2014.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\11\
---------------------------------------------------------------------------

    \11\ 17 CFR 200.30-3(a)(73).
---------------------------------------------------------------------------

Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2014-09394 Filed 4-24-14; 8:45 am]
BILLING CODE 8011-01-P
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